Newsom must prioritize affordable middle-class housing

The Hunter's Point Shipyard housing construction along Kirkwood Avenue on Wednesday, Dec. 19, 2018, in San Francisco, Calif.

Photo: Santiago Mejia / The Chronicle 2018

With a 62 percent electoral mandate, legislative supermajority and large war chest, Gavin Newsom is in a better position than any governor in recent memory to address California’s housing and homelessness crisis.

We have too few homes — that cost too much — and the resulting shame of leading the nation in poverty and homelessness.

Newsom promised strong action to radically increase home production, from today’s 80,000 to more than 500,000 new units per year.

However, expanding rental units and homeless shelters won’t solve the “missing middle” housing plague affecting working Californians. Newsom must also restore homeownership as a top housing priority.

Prioritizing homeownership also fulfills Newsom’s promise to confront racial injustice. After World War II, while banks were “red-lining” black and Latino neighborhoods to deny them mortgage loans, federal, state and local agencies were implementing policies to subsidize home purchases by white families while directing minorities to rentals.

The two most important steps Newsom can take to produce more homes, and make homeownership attainable again for middle-class Californians, is to stop the anti-housing abuse of environmental laws, and to cap government fees on new housing while returning a fair share of property taxes to local governments.

First, Newsom should rescind recently approved expansions of the California Environmental Quality Act by the California Air Resources Board and the Natural Resources Agency. These unlegislated expansions of CEQA will make building new homes — and related transportation improvements — even more costly, and even easier to block with lawsuits.

The dirty little secret of California’s climate regulators is their focus on increasing the cost of basic necessities such as housing and electricity on middle-class families. More than 140,000 Californians have left the state each year since the end of the Great Recession, primarily to find housing they could afford — and moved to states like Texas where per capita carbon emissions are much higher.

The air board’s anti-housing climate policies, like making housing even more expensive and making it easier to sue under CEQA, hits California’s ethnic minorities and Millennials the hardest — while the air board avoids mandating far greater carbon emission reductions from forest fires and luxury consumer imports of concern to environmental elites. Newsom must revise the air board’s unlegislated climate policy choices to align with his commitment to housing and equity.

Second, Newsom should use his emergency authority to cap fees imposed by state and local government at 8 percent. Cities and other agencies routinely pile on fees of up to $150,000 on each new home, which are passed on to home buyers and guarantee unaffordable home prices when added to standard land, materials and labor costs. Government agencies should not charge residents of new homes the equivalent of a Trump country club initiation fee.

Newsom must also recognize the frustration that Californians have with inadequate transportation and other infrastructure and local services, and assure that cities and counties each keep a minimum of 25 percent of property taxes to pay for local infrastructure and services. After Proposition 13 was enacted, state bureaucrats decided that California’s big cities could keep up to 25 percent of property tax revenue. But smaller and newer cities got less than 10 percent — an unfair allocation that was never approved by the Legislature or voters that must end.

Retaining more property tax revenue for local services will require Newsom to finish the work Gov. Jerry Brown began to reform public employee pensions. This will require standing up to the state’s powerful public employee unions.

But what is the point of having a 62 percent electoral mandate and a supermajority if not to take on the powerful interest groups that produced this housing, poverty and homelessness crisis? Voters recognize and reward authenticity and boldness. The key to sustaining California’s tax base is turning today’s Millennials, ethnic minorities and students into future homeowners.

Newsom also should appeal directly to the enlightened self-interest of today’s homeowners. Those of us who own homes and raised families in California want our children to be able to own homes and raise our grandchildren near us. By sending away to other states more than 140,000 middle-class people every year, we are eating our seed corn — and undermining our future.